A Manhattan federal judge denied class certification for three credit unions challenging a state law that lowers the default interest rate on consumer debt judgments. Judge Mary Kay Vyskocil ruled that The Greater Chautauqua, Boulevard, and Greater Niagara Federal Credit Unions waited too long to file, calling the delay “abusive and tactical.”
Plaintiffs Greater Chautauqua Federal Credit Union, Boulevard Federal Credit Union, and Greater Niagara Federal Credit Union brought the proposed class action claiming that the retroactive application of the Fair Consumer Judgment Interest Act, which reduced the default post-judgment interest rate on state-court judgments involving consumer debts from 9 percent to 2 percent, is unconstitutional.
Judge Vyskocil's decision referenced the report of Vega's expert Professor Jim Wilcox, a Professor at UC Berkeley. She agreed with the defendant's argument that the class was not ascertainable as it included many potential members that had abandoned debt collection. She quoted Prof. Wilcox's explanation that “debtors sometimes declare bankruptcy, lack attachable assets, die without assets, or cease all contact with the creditor, each of which would eliminate (or severely reduce) the possibility of any more payments.” (Wilcox report at ¶ 45). Judge Vyskocil also concluded that the proposed class includes members who are not at risk of injury and that the Court would need to engage in individualized analysis to ensure that the relief sought is appropriate for all members included in the proposed class.
Jim Wilcox is a Professor of the Graduate School at the Haas School of Business, UC Berkeley. His research interests include Federal Reserve policies and interest rates, banks’ lending, consumer attitudes and spending, credit unions, Islamic banking, and nonfinancial corporations’ internal capital markets. Wilcox originated Fannie Mae’s monthly Home Purchase Sentiment Index (HPSI). At the Haas School, Wilcox teaches courses on macroeconomics and on banking.
For more information about our role on this case, or to retain Dr. Wilcox as an expert, email us at info@vegaeconomics.com.
